Swimming

The U.S. natural gas rig count peaked more than a year ago in August 2010 and continues to drift slowly lower, but the country’s still swimming in gas and there’s no drought in sight, Raymond James & Associates Inc. said Monday.

If one believes the shale gas story — that North America is swimming in the stuff — then it’s obvious that the market needs a sponge to soak up the supply. Gas-fired power generation is easily the largest and most likely, but its absorbency will be dictated by constraints on coal-fired power emissions that have yet to be worked out, let alone understood.

June natural gas futures lost ground in active inventory report-driven trading Thursday as natural gas bulls found themselves swimming upstream against government storage data that showed a greater-than-expected addition to inventories and continuing upheaval in oil and financial markets.

San Juan Basin and California were conspicuous Monday as theonly markets swimming against a bearish tide. All other cash pointswere falling by anywhere from a penny or two (Southwest/Rockies) to15 cents or more, with the majority of declines tending to bebetween a nickel and a dime.